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DSV will become the world’s largest logistics management company after the Danish group agreed to buy Deutsche Bahn’s logistics unit Schenker in a €14.3bn deal.
The all-cash acquisition will double DSV’s revenues and workforce, giving the combined company €39bn in annual sales and 147,000 employees. It will offer customers air, sea and road freight as well as warehousing and logistics.
DSV has grown aggressively through acquisitions since it was founded by 10 small independent Danish trucking companies in 1976. It has bought companies such as DFDS Dan Transport, ABX Logistics and Panalpina, and after the Schenker deal will become the world’s largest freight-forwarder, organising cargo transport for companies that want to move their products.
“With the acquisition we bring together two strong companies, creating a world-leading transport and logistics powerhouse that will benefit our employees, customers and shareholders,” said Jens Lund, who took over as DSV chief executive in February.
The deal is the largest in the history of Deutsche Bahn, the German state-owned rail company, and will be used to pay down its debt. It values Schenker at €14.3bn in enterprise value with €11bn of equity. Richard Lutz, Deutsche Bahn’s chief executive, said the transaction provided Schenker “with clear growth prospects”.
DSV will finance the acquisition through a share sale of up to €5bn as well as debt. It expects to close the deal in the second quarter of next year, subject to regulatory approval. It also requires approval from Deutsche Bahn’s supervisory board and the German transport ministry, both expected in the coming weeks.
The Danish group estimates the deal will give it a global market share of 6 to 7 per cent of third-party logistics providers and allow it to overtake DHL’s logistics business and Kuehne + Nagel on revenues.
Shares in DSV, which have increased more than eight-fold in the past decade, rose 3 per cent on Friday morning to DKr1,420.
DSV has made commitments to protect Schenker jobs in Germany for two years from the closing of the deal, and said it would invest €1bn in the country in the next three to five years. It added that it expected to have more workers in Germany in 2029 than both companies have at present.
The Danish group touts its ability to integrate acquired companies, including much bigger businesses such as DFDS Dan, which had four times the revenues of DSV when it was bought by its rival in 2000.
DSV beat competition from private equity firm CVC to buy Schenker. Rival Danish group AP Møller-Maersk, the container shipping group that has been expanding its logistics business, withdrew from bidding for Schenker in July.